Social media has revolutionized the ways in which individuals communicate, share information, and engage civically within communities globally. The rapid rise of platforms like Facebook, X (formerly Twitter), WhatsApp, Instagram, TikTok, and YouTube has had a considerable impact on community development by fostering knowledge exchange, encouraging social involvement, enhancing local governance, and promoting economic growth. This literature review amalgamates empirical and theoretical research published from 2020 to 2026 regarding the role of social media in community development. It highlights both the beneficial and detrimental aspects of social media usage in communities. While it promotes participatory development, social inclusion, emergency response, entrepreneurship, education, and public health messaging, it also poses challenges such as misinformation, cyberbullying, digital divides, privacy issues, and online divisiveness. The review emphasizes that to fully harness the advantages of social media for development, there needs to be a focus on improving digital literacy, enacting inclusive policies, ensuring ethical governance, and fostering collaborative efforts among stakeholders.